JP Morgan Asset Management has launched a Ucits-compliant US corporate bond fund, as it looks to take advantage of foreign investors turning to the US fixed income market for yield.
The JPMorgan Funds – US Corporate Bond fund became available to investors on 21 October and is an actively-managed strategy.
The fund will be managed by Citywire A-rated Lisa Coleman, who is head of investment grade credit at the firm, alongside AAA-rated Jeremy Klein and Lorenzo Napolitano who currently runs the JPM Financials Bond fund.
All three managers have extensive experience in global credit and are currently co-manage the $2.4 billion JPMorgan Funds Global Corporate Bond fund, which is available only to US investors.
Rather than taking large duration or off-benchmark bets, the fund aims to generate alpha from security and sector selection, driven by the fundamental research of dedicated career credit analysts.
The fund will utilise a well-established and integrated investment process combining macro, sector-level and fundamental credit research to drive investment ideas.
Commenting on the launch, Coleman said: ‘As a function of extraordinarily accommodative global monetary policy, nearly one in three government bonds today are trading at a negative yield, and more than 60% of the global government bond market is yielding less than 1%.’
‘The sheer amount of low and negative-yielding government bonds is increasingly pushing investors into corporate debt as they seek positive returns. Simultaneously, the significant incremental purchasing activity by central banks is underpinning valuations of higher quality credit. Those strong technical factors will remain meaningful tailwinds for the performance of investment grade credit.’
Also commenting on the launch, head of European funds, Massimo Greco said: ‘The fund taps into our long history of expertise in the USD credit markets and offers a diversification opportunity to European investors grappling with the European Central Bank’s negative interest rate policy.’
‘The reality is that the US remains a market where fixed income yields look more attractive on a relative basis.’